As shoppers flock to buy on Black Friday, Small Business Saturday, Cyber Monday and Super Saturday (the last Saturday before Christmas), the year 2019 is shaping up to be another positive year driven by the American consumer. The U.S. economy continues its remarkable growth streak, breaking records for the stock market and employment, and achieving strong, steady GDP growth.
And the 2019 holiday sales outlook in the fourth quarter is expected to be bright for many small businesses.
2019 Holiday Sales Outlook
That’s important because millions of small businesses make a large chunk of their revenue — and profits — during the fourth quarter. According to a survey by Kabbage, one third of small businesses reported the 4th quarter as their most profitable time of year.
Below are key numbers for the 2019 holiday sales forecast and beyond into 2020. Jump to the following 2019 holiday statistics:
- Overall Small Business Outlook
- Retail Forecast
- Restaurant Outlook
- E-commerce Outlook
- Digital Publisher Outlook
Overall Small Business Holiday Outlook
How are small business owners feeling about the economic outlook as a whole? Very positive:
- The most recent Small Business Optimism index report for October 2019 rose slightly to 102.4, which the NFIB calls “historically a very solid reading.” Over the years, the Index has ranged from a record low of about 80 to a high of around 107, to put it in perspective. This means the current optimism is closer to historic highs, and that’s good.
- The NFIB Uncertainty Index fell 4 points in October to 78 — and that’s also a good thing. The Uncertainty Index measures when owners are not sure about what the future holds. For perspective, one of the most uncertain times was August of 2016 when the score was 87. While there is still some uncertainty with the situation in Washington, this move is positive.
- The consumer spending forecast is excellent. Consumer sentiment numbers are holding up well. They are in the upper ranges historically, as shown by the chart below from Tradenomics / University of Michigan. The red circle shows the current level.
Retail Sales Forecast for Holiday 2019
Americans love to shop at the holidays, and they plan to frequent small business retail outlets.
- Consumers expect to spend an average of $1,047 this 2019 holiday season. That’s 4% more than last year, according to the National Retail Federation.
- Shoppers aged 35 to 44 plan to spend the most, at $1,158.
- More than 165 million people are expected to shop over the 5-day Thanksgiving weekend. Over 66 million are expected to shop on Small Business Saturday, per the NRF.
- 70% say discounts are the biggest factor in choosing where they will buy.
- 83% of consumers plan to do some portion of their holiday shopping at a small retailer or restaurant – either in person or online. That’s according to American Express.
- Consumers are estimated to spend around $10 billion on Small Business Saturday at small establishments.
- Shopping doesn’t stop at Christmas. December 26th is the fourth busiest shopping day of the year per Bing.
- In fact, support lasts all year long. 91% of consumers shop at a small business at least once per week. And 64% shop at least twice a week, according to research by SCORE.
Restaurant Industry Outlook
Americans love to eat out at restaurants, and growth is expected for 2019. It should be a good holiday season, despite staffing and profit margin challenges.
- Restaurant sales for full-year 2019 are expected to grow by 3.6% to a total of $863 billion, according to the National Restaurant Association.
- Consumer support for Small Business Saturday helps, as the “shop small” movement has spilled over to the concept of “dine small.”
- The restaurant industry is well populated by small businesses. There are over 1 million restaurant locations in the United States alone — and 70% are single-unit operations.
- Staffing pressures will require restaurant operators to increasingly hire older workers due to demographic changes and low unemployment rates, predicts the NRF. In 1978 there were almost 10 million teenagers in the workforce. Workers 65 and older numbered only about 3 million back then. Fast forward to today. Older adults in the U.S. workforce outnumber teenagers by more than 4 million.
- Restaurant margin pressures continue, but operators are turning to technology to drive efficiencies. Per the Association’s “Restaurant Industry 2030” report, “There will be a strong motivation to automate routine back-of-house tasks in restaurant kitchens and bars, as well as escalate the use of kiosks and digital ordering.”
- Local bakeries are among shoppers’ favorite destinations (40%). Restaurants and bars are also favorites (37%), as this infographic by SCORE and Nav shows:
E-commerce is a growing channel for small businesses, especially as shoppers shift more of their dollars to online shopping.
- Many small ecommerce businesses have adopted a “if you can’t beat ‘em, join ‘em” attitude toward Amazon. 58% of what Amazon sells is now from third party sellers, many of them small businesses.
- For the 13th year in a row, gift cards are the most popular item on consumer wish lists. They are requested by 59% of people, per the NRF. If you don’t already sell gift cards, it’s not too late to start.
- Cyber Monday has the highest conversion rate of the season at a stunning 6.39%, according to Microsoft’s Bing. So if you’re planning to advertise to get more sales, enjoy the higher than average results on that day.
- 47% of online shoppers don’t want to pay for shipping, according to Bing research. You might consider participating in Free Shipping Day, a voluntary event for merchants on Saturday, December 14, 2019. Or extend free shipping throughout the holiday season and highlight it on your website as an incentive for shoppers.
- See more ecommerce statistics.
Digital Publisher Outlook
For small online publishers that earn from ad revenue, the holiday outlook is excellent. It’s shaping up to be a big year for the remainder of 2019 and the foreseeable future.
- “[T]he digital advertising industry remains one of the strongest and most dynamic sectors of the U.S. economy. At nearly 17 percent growth from the prior half year, the digital advertising industry is still far outpacing all other ad supported mediums.” That’s according to the latest report from the Internet Advertising Bureau (IAB) for the first half of 2019.
- Revenues for the first half of 2019 set a new record, at $57.9 billion. Mobile ads accounted for 69% and desktop for 31%.
- The fourth quarter is traditionally the highest earning season for publishers because advertisers spend more in the fourth quarter.
- Ad revenues this quarter have already tied for second highest place (apart from Black Friday week last year), as the Ezoic Ad Revenue Index shows through November 15th. And we haven’t even hit Black Friday Week yet for 2019. Traditionally that is the highest-earning week of the year.
For many industries, times are good right now with a booming economy and happy consumers with full wallets. The 2019 holiday sales outlook is bright.
Here’s to making the 2019 holiday season YOUR best performing ever!
Images: Shutterstock; and Small Business Trends charts mixed from Tradenomics, SCORE, Ezoic